15 November 2012

Nigeria: Funds May Delay Mambilla Power Project Implementation

Fresh facts have emerged that the 3050 Mega Watts (MW) Mambilla power project may be faced with funding crisis following the conflict generated by the new Memoradum of Understanding (MoU) signed last week between the federal government and a Chinese firm, Sinohydro, for the execution of the project.

This development dashes any hope previously entertained by the consortium CGGC/CGC which had won a Lot 1 of the project during former President Olusegun Obasanjo administration in 2007, that the federal government may revisit the contract and re-award the Lot 1 which involves engineering and metallurgical works to them.

It was learnt that the Chinese government may be reluctant to deliver on its pledge of counterpart funding of 75 per cent of the project cost due to the issues brought about by the conflict.

The Mambilla plant which is expected to be undertaken on a Build, Operate and Transfer (BOT) concession agreement, will cost $3.2 billion.

Following the new contracting arrangement for the execution of the project, Chinese firm, Messrs Sinohydro is expected to cover 70 per cent of the project, while Messrs CGGC is to cover 30 per cent of the project scope.

But CGGC was conspicuously absent at the signing ceremony last week over grievances that the federal government failed to re-visit the contract for Lot 1 of the project which they had won during the Obasanjo's administration and later revoked by the late President Musa Yar'Adua's administration.

Their absence at the MoU signing, according to inside sources, was an indication of their disapproval of the new arrangement.

The Chinese Ambassador to Nigeria, Mr. BengBoqing, had expressed worry over the termination of the previous contracts at a meeting with the former minister of state for Power, Arch. Darius Ishaku, where he had noted that it was wrong for the Nigerian government to work out on an agreement without consulting her partners or other parties.

However, when contacted, the deputy director, press, in the Ministry of Power, Mr. Greyne Anosike, told LEADERSHIP that CGGCwithdrew from the project on the eve of the signing of the new MoU.

On whether they would be refunded for what they had committed into the project before it was terminated, Anosike said: "Well, if they withdrew on their own accord, then there will be no refund, but if government was the one that asked them to withdraw, then there has to be a consensus somewhere."

Copyright © 2012 Leadership. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.

AllAfrica publishes around 2,000 reports a day from more than 130 news organizations and over 200 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.